Californians looking to buy a house face some of the country’s most expensive real estate prices and wildfires that threaten scores of housing tracts. Now there’s another obstacle: finding an insurer willing to cover their dream home.
State Farm General Insurance Co. said it’s no longer accepting new applications for property and casualty coverage in California last week, a year after Allstate Corp. also paused new policies, worsening what FAIR Plan, a state-mandated insurance pool, called a “looming insurance unavailability crisis.”
“We have a lot of people going naked, which means they have no insurance,” said Bill Dodd, a Democrat state senator representing fire-scarred Napa County and other parts of Northern California. “What my constituents want is insurance.”
The FAIR Plan, which offers minimal coverage and high rates is meant to be a provider of last resort, but enrollments have surged 70% since 2019 to 272,846 homes in 2022.
It’s a blow for the nation’s most populous state, which is already struggling with an exodus of residents, many of whom are escaping the high cost of living.
The Golden State is grappling with a roughly 1 million-unit housing shortfall, in part fueled by rising costs and zoning restrictions that have choked off new construction projects. On top of that, a series of catastrophic wildfires in recent years have increased calls from insurers to weaken the state’s consumer-friendly policies that have held down rates for decades.
The average homeowners’ policy is $1,300 in California compared to over $2,000 in other states with wildfire risk and $4,000 in hurricane-prone Florida, according to Insurance Information Institute.
But new home buyers could be forced to pay more, regardless of their home’s proximity to wildfire dangers. Before State Farm’s announcement, the company requested a 28% rate hike on homeowners’ insurance, while Allstate has filed for a 39.6% increase.
The insurance crunch is affecting buyers across the state already, even in areas where the wildfire risk is low. In San Francisco, realtors say they have seen deals fall through because would-be buyers couldn’t get insured.
“What we’re hearing is that now, when buyers present an offer on a property we’re not only asking them for pre-approval for a lender, we’re also asking them if they’ve spoken to their insurance agent if they’ll insure the property,” said Joske Thompson, a realtor at Compass Inc. with 40 years experience in the area.
Home insurance is an essential step of purchasing a home. Mortgage lenders generally require proof of insurance before approving the transaction to protect their investment in the property. Without insurance. buyers would be forced to make an all-cash purchase in most cases.
Finding a Compromise
As the state’s insurance woes accelerate, the industry is taking aim at California’s marquee consumer protection law, Proposition 103, a ballot measure voters approved in 1988. The law has saved consumers tens of billions of dollars in reduced insurance rate hikes, according to the state’s insurance regulator.
“In the last six years, we lost 20 years’ worth of underwriting profit, and that was due to the catastrophic wildfires that we’ve faced,” said Janet Ruiz, a spokesperson with the Insurance Information Institute.
Harvey Rosenfield, the author of Prop 103 and founder of the Consumer Watchdog advocacy group, said climate change might require insurance companies to raise rates, but he argued that companies are using wildfire impacts to gouge customers.
“Insurance companies are very opportunistic,” he said. “They have seized on climate change as an excuse to escape from the regulatory protections that voters enacted.”
State lawmakers and industry representatives must find a compromise that would keep the insurance market viable while protecting consumers from excessive rate hikes, but that may mean Californians will have to pay more for home insurance in the future, said Dodd.
“You bite the bullet and you move forward,” said Dan Dunmoyer, president of the California Building Industry Association. Without rate increases, more insurers may leave the state, affecting everything from mortgage lending to housing supply, he said.”You have a market that is teetering on collapse.”
Refinancing a mortgage can be a great financial move for homeowners to potentially lower monthly mortgage payments, tap home equity, or build equity more quickly by shortening the term of the loan.
Refinancing can save you money — but it can cost you money too. Before you start the refinancing process, you should know how it works, the benefits and drawbacks, and the steps you’ll need to take.
What Is Mortgage Refinancing and Why You Might Want to Refinance?
Refinancing a home mortgage is basically replacing your existing mortgage with a new one, typically with a different principal and interest rate.
There are many reasons why borrowers choose to refinance a mortgage, including:
To take advantage of lower market interest rates
To shorten the term of their loan
To withdraw a portion of their equity
To lower their monthly payments with a longer repayment term
To convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage
To remove or add another person to the mortgage
Choosing the Right Type of Mortgage Refinances
There are three main types of mortgage refinances: rate-and-term, cash-out, and cash-in.
Rate-and-term refinance: This type of refinancing allows the borrower to change the interest rate, the term of the loan, or both without advancing any new money.
Cash-out refinance: A cash-out refinance takes advantage of the built-up equity in the home and gives the borrower cash in exchange for a larger mortgage.
Cash-in refinance: A cash-in refinance allows homeowners to pay a large sum towards their principal balance during the refinance process.
4 Benefits of Refinancing a Mortgage
Your decision to refinance your home mortgage ultimately depends on your goal. Do you want to lower your monthly payments? Are you hoping to shorten the length of your loan?
Here are some common reasons that people choose to refinance:
Changing the length of your loan. By refinancing from a 30-year mortgage into a 15-year mortgage, you could pay it off in half the time. This also results in paying less interest; however, your monthly payment may go up.
Switching to a different loan type. Some homeowners choose to refinance their mortgage to change their loan types. For example, refinancing from an adjustable-rate mortgage to a fixed-rate mortgage. The interest rate for an adjustable-rate mortgage can go up and down over time but the interest rate for a fixed-rate mortgage doesn’t change.
Tapping into your home equity. Want to do some home improvements, pay off debt, or even take a trip? You can do a cash-out refinance to borrow more than you owe on your current mortgage.
Getting a lower interest rate. Interest rates fluctuate for a variety of reasons. Refinancing could make financial sense if you can get a lower interest rate than when you originally took out your mortgage. If you can secure a lower interest rate, you could potentially save money and pay off your mortgage faster.
Calculate how refinancing might affect your monthly payments with Total Mortgage’s Refinance Calculator and see how much you can save.
How to Refinance a Mortgage: 4 Key Steps
Refinancing a mortgage is very similar to purchasing a home; however, it’s a little less complicated. But how exactly does refinancing your home work? Here is a simplified step-by-step guide:
Understand your reasons for refinancing. Before you refinance, you need a clear goal. What do you want out of your refinance and what type of loan will help you achieve that goal?
Apply for a refinance. Once you’ve selected your lender, you’re ready to complete your refinance application, lock your interest rate, and submit any necessary documents. Keep inmind that you don’t have to refinance with your current lender. Exploring other landers’ options could increase your chances of finding a better interest rate with more favorable loan terms.
Appraisal and underwriting. The underwriter will review the application and documents and offer conditional and/or final approval of the loan. The lender will also order a home appraisal to verify the current home value.
Close on the loan. The home closing is when you and your lender will go over the loan documents and finalize all details. You’ll need to sign documents and pay closing costs listed in the Loan Estimate and the Closing Disclosure.
The time it takes to refinance a mortgage depends on several factors, such as credit checks, appraisals, and the lender. Refinancing a mortgage can take anywhere from 15 days to 45 days or longer, with an average of 30 days to close.
Costs of Refinancing a Mortgage
Refinancing isn’t free — but depending on your circumstances, it can be worth it. Closing costs typically include origination fees, home appraisal, and recording. Depending on where you live and your lender, there could also be an attorney fee and title search, and insurance.
Closing costs are generally a percentage of your loan amount —about 2% to 5% — though these are just estimates and costs may vary depending on the state and county where you live as well as your lender.
Not every closing will cost you money at the closing table. You could also have a no-closing cost refinance.
This is a refinance where instead of paying upfront, closing costs are either rolled into the new loan or the lender may raise your interest rate. While this does mean that you need to come up with less money at closing, you could end up paying more over the long run.
Explore Total Mortgage’s Refinancing Options
Unsure if you should refinance? Refinancing a mortgage could potentially lower your monthly payments with more favorable terms. Another option is to use a mortgage refinance to tap your home’s valuable equity and use the cash as you please.
If you’re looking to refinance a mortgage, be sure to check out Total Mortgage’s list of branches across the US and find the one nearest to you. You can also apply online and get a free rate quote.
To say that mortgage rates have been on a wild Mr. Toad’s ride in 2022 is an understatement. In less than a year, we went from 2.78% on the 30-year fixed to as high as 6.28%, then recently got as low as 5% — only to have another move higher this week to 5.30%. People thought the mortgage rate drama in 2013-2014 was a lot when rates went from 3.5% to 4.5%. However, as we all know, after 2020, things are just more intense.
The question is, can lower mortgage rates save the housing market from its recent downtrend? To understand this, we need to look back into the past to realize how different this period is from what we had to deal with in the previous expansion when rates rose and then fell.
Higher rates and sales data
We can see that when rates rise, sales trends are traditionally lower. We saw this in 2013-2014 and 2018-2019. We know the impact in 2022, working from the highest bar in recent history.
The most significant difference now from what we saw in the previous expansion is that mortgage rates never got above 5% in the previous expansion. However, more importantly, we didn’t have the massive home-price growth in such a short time. It does make an enormous difference now that home prices grew above 40% in just 2.5 years.
This is why I focused my readers on the years 2020-2024, because if home prices only grew by 23% over five years, we would be ok. However, that got smashed in just two years, and prices are still rising in 2022. It’s savage man, truly savage with the mortgage rate rise. Yes, rates bursting toward more than 6% is a big deal in such a short time, but the fact that we had massive home-price growth in such a short time (and in the same timeframe) is even more critical.
While I truly believe that the growth rate of pricing is now cooling down, 2022 hasn’t had the luxury of falling prices to offset higher rates. So we can’t reference this period of time with rates falling as we did the previous expansion due to the massive increase in home prices and the bigger mortgage rate move. In 2018, sales trends fell from 5.72 million to the lows of January 2019 at 4.98 million. This year we have seen sales fall from 6.5 million to 5.12 million, and they are still falling.
Housing acts better when rates are below 4%
In the past, demand improved when mortgage rates were heading toward 4% and then below. Obviously, we are nowhere close to those levels today, barely touching 5% recently to only go higher in the last 24 hours.
Again, I stress that the massive home-price growth is different this time. However, with that said, considering the sales decline trends and that we have seen better-than-average wage growth, housing demand should act much better if rates head toward 4% and below.
I stress that higher and lower mortgage rates impact the market, but it needs time to filter their way into the economy. When I talk about the duration, this means rates have to be lower for a more extended period. People don’t throw their stuff down and buy a home in a second; purchasing a home is planned for a year. Rates would need to stay lower for longer into the next calender year to make a big difference.
Millions and millions of people buy homes every year. They have to move as well, so a traditional seller is a buyer most of the time when it’s a primary resident owner. Sometimes when rates go higher too quickly, some sellers can’t move, this takes a sale off the data line, but if rates fall quickly, they might feel much better about the process.
The downside of rates moving up so quickly is that some sellers pull the plug until rates are better. We see some of this in the active listing data as new listings are declining. Lower rates may pull some of these listings forward as people feel more comfortable with rates down; time will tell.
Of course, a 1% move lower in rates matters, but keep in context where we are coming from and how much home-price growth we have had in just 2.5 years. This isn’t like the previous expansion where home prices were working from the housing bubble crash and affordability was much better back then.
When to know when lower rates are working?
The best data line to see this take place is purchase application data, which is very forward-looking as the fastest data line we have in housing. Let’s take a look at the data today. Purchase application data was positive week to week by 1% and down 16% year over year. The 4-week moving average is down negative 17.75% on a year-over-year basis.
This is one data line that has surprised me to a degree. I had anticipated this data to be much weaker earlier in the year. However, I concluded that 4%-5% mortgage rates didn’t do the damage I thought they would do. But, 5%-6% did, as I was looking for 18%-22% year-over-year declines on a four-week moving average earlier in the year. So, this makes me believe that if rates can get into a range of 4.125%-4.50% with some duration; the housing data should improve on the trend it has been at when rates are headed toward 6%. Again, we aren’t there on rates yet.
The builders would love rates to get back to these levels so they can be sure to sell some of the homes they’re finishing up on the construction side. Now assuming rates do get this low; what would the purchase application data look like? Keep it simple, the year-over-year declines will be less and less, and then when things are improving, we should see year-over-year growth in this index.
A few things about purchase apps: the comps for this data line will be much more challenging starting in October of this year. Last year’s purchase application data made a solid run toward the end of the year, which led existing home sales to reach 6.5 million. Next year we will have much easier comps to work with, so we need to keep that in mind. However, to keep things simple, the rate of change in the purchase applications data should improve yearly.
To wrap this up, lower mortgage rates should be looked at as a stabilizer first, but for them to change the market, we will need much lower rates for a more extended period. Also, we have to consider that rates moving from 3% to 6% is historical, and if rates fall, we have to look at housing data working from an extreme rise in rates that happened quickly. However, sales levels should fall if purchase application data shows negative year-over-year prints on a double-digit basis.
Since home prices haven’t lost this year, you can see why I used talked about this as a savagely unhealthy housing market. The total cost of housing had risen in a fashion that isn’t comparable to what we saw in the previous expansion when rates went up and down due to the massive increase in home prices. Also, we have to know that we aren’t working from a high level of inventory data as well. Traditionally, total inventory ranges between 2 to 2.5 million. We are currently at 1.26 million.
NAR total inventory data
We shall see how the economic data looks for the rest of the year and if the traditional bond and mortgage rate market works as it has since 1982, then mortgage rates will head lower over time. However, as of now, it’s not low enough to change the dynamics of the U.S. housing market.
Building or purchasing a home can be a daunting task as it involves several considerations, many of which must be planned well in advance. For prospective homeowners in India, the most significant concern is often the substantial financial investment required to construct or buy a property.
While many Indians invest their savings in purchasing or renovating a home, they may still fall short of the necessary funds. In such cases, Home Loans can be a suitable solution. Moreover, securing a housing loan in India has become much simpler in recent years.
Previously, applicants had to visit a bank office, undergo KYC and credit checks, and wait for approval. However, now one can easily apply for a home loan with just a few clicks online, submit a few essential documents, and wait for the bank to complete the remaining necessary checks.
In this article, we will guide you through everything you need to know about home loans up to Rs 75 lakh.
How To Apply For Home Loans Up To Rs. 75 Lakhs
Applying for a home loan for Rs 75 lakh can be done by visiting the relevant lender’s website and following the steps outlined below:
Select “Home Loan” from the list of loans.
Select the “Apply Online” option. You will be directed to a website where you must enter your name, mailing location, email address, contact phone number, and PAN.
On your cell number, you’ll get an OTP.
Enter the OTP to confirm.
Select the loan’s value and term. You’ll be taken to another website where you must enter your job, salary, and property information.
To finish the web registration procedure, the ‘Submit’ option must be clicked.
You will be contacted by an employee of the relevant bank or financial organisation for additional help. The agent will also pick up the papers from your contact location.
Eligibility Requirements For Home Loans Up To Rs. 75 Lakhs
The usual eligibility requirements for home loans up to Rs 75 Lakh are as follows:
If applying as a salaried person, the candidate should fall between the ages of 21 and 60 or 21 and 65 if applying as a self-employed person.
The required minimal annual revenue will range from Rs 25000 to Rs 30000.
The ideal debt-to-income ratio is 40% to 50%.
The minimal credit score ranges from 650 to 750.
The credit is open to both Indian citizens and non-residents.
Important Documents For Home Loans Up To Rs 75 Lakh
You must send the following paperwork with your home loan application to be eligible for a house loan of up to Rs 75 lakh:
Income records for those who are employed
Pay stubs from the previous three months
Current Form 16
Statement of recent six-month bank accounts
Income tax returns for independent contractors
Financial records that have been audited for the past two years, such as the profit and loss account and balance sheet
ITR for the previous two years
Statement of bank accounts for the previous 12 months.
Property records (copies to be submitted)
Deed of Sale
Contract of Sale
Latest receipt for property taxes paid
Proof of encumbrance for the previous 13 years
Factors That Affect The Rs 75 Lakh Home Loan EMI
The factors that impact the Rs 75 lakh home loan EMI are:
Income: People working for federal, state, or local governments or the public sector are assured of a salary. These borrowers will thus pay relatively reduced interest rates, resulting in cheaper overall credit costs.
Interest rate: If you selected a fixed interest rate, your interest payment would be between 1% and 2% more than if you had selected a variable interest rate.
LTV Ratio: The LTV Ratio affects the interest rate that is applied. Banks typically offer home loans for 75% to 90% of the property’s market worth. The greater the margin, the smaller will be the interest rate, as the potential for loss is smaller for the lender. The EMI will decrease if the interest rate is cheaper too.
Duration: An increased EMI will result from an extended term and vice versa.
Techniques To Reduce The EMI For Rs. 75 Lakh Home Loan
The EMI does not have to remain at the same amount as when the debt was first obtained. Thus, you can decrease the 75 lakh home loan EMI and subsequent debt costs in several methods. This includes:
Implementation Of An Improved Debt Rate System
According to RBI rules, the interest rate system is constantly transforming. It might be the MCLR, BPLR, Base Rate, or EBR.
As you can see, BPLR charges an interest rate significantly greater than the other interest cost structures, with EBR charging the lowest interest rate.
Make The Step-Down EMI Choice.
You can choose the step-down EMI choice if you are a young person who has just begun your job. In this case, the EMI would be originally made greater and progressively decreased over time.
As a result, you’ll be able to pay less interest during the first few years when the capital is falling off quickly. The demand will decrease in line with that.
Change The Interest Rate On Your Loan From Set To A Variable.
A set interest rate typically costs more than a variable interest rate. The set EMI is a benefit of selecting a fixed interest rate.
Furthermore, it will aid in managing the money needed for the long-term EMI payment. You won’t frequently be caught off guard when the EMI unexpectedly rises in response to an increase in the interest rate.
Transfer The Outstanding Amount Of Your Mortgage To A New Provider With A Lower Interest Rate.
You can move the outstanding Home Loan amount to a provider who provides a loan at a reasonable interest rate. This is possible if you did not compare interest rates when initially filing for it and later discovered that you are paying a greater interest rate. This will ease the weight of your EMIs.
In conclusion, many people consider owning a house a significant life objective. There are many Indians who are willing to spend anything necessary to realise this goal. Although purchasing a property is a very costly expenditure, it is possible to opt for a housing loan in India up to Rs 75 Lakh.
International Women’s Day celebrates the social, economic, cultural, and political achievements of women. This year the IWD theme is #BreaktheBias – focused on acknowledging the daily challenges that women still face in the workplace and society. This year, we wanted to let our employees share what IWD means to them. Below are some of the responses we received.
I believe International Women’s Day is very important. Not just to honor professional women, but the single mothers, the wives, or the female college students working hard towards their degrees to make their marking on society.
On this day, I most importantly would like to honor the women that fought for us to have the rights we have today. They were our voice then, now and for generations to come. Without them we wouldn’t be able to hold the positions we have in the workforce, have the privilege to vote and do things as simple as purchasing a home or open a credit card without the signature of a man (husband or father) to validate you as a person.
As a first-generation woman in this country with Dominican roots and being raised by a single mom, I saw the struggles and how hard she had to work to get ahead, but always teaching us that giving up is not an option and that you are in a country where if you work hard, you can achieve whatever you set your mind on.
As the years have passed women have been given the rights to participate in many more arenas and our future is looking brighter. I hope to be an example for my daughter’s future, like my mom was to me, that if she has the drive, she can accomplish anything she wants in life.
I am honored to be a woman; I am honored to be a minority and I hope that for generations to come women feel empowered within their positions to grow.
It means celebrating women and all their achievements. For me being a mom, manager, producer, home owner, volunteer but all of that as a woman. I think women bring multitasking and care to the workforce while balancing home and work. And regardless of gender we all work to improve our lives inside and out of work.
International Women’s Day and National Women’s month is a celebration for all the woman who have dared to dream big and dare to chase those dreams. It’s a celebration of the hard work, determination and fire that burns within us. Its for all the mothers, daughters, sisters who have fought for build businesses and raise families and be proud of all we’ve achieved.
It means celebrating women’s success – I feel like it’s as simple as that.
This is a day to acknowledge and honor women around the world for the contributions we make every day!
International Women’s Day should be everyday but since there’s one day which we celebrate it….I’m just so proud, honored and humbled to know some exceptional women from all walks of life. We may have different careers and paths but we share a common goal….we want to see each other succeed! We get to be cheerleaders for one another and lend a hand when we see someone in a tough place as well as rejoice with those that have made it to the other side. We as women all have a story and I’m thankful for all the women that have played such an important role in my life. My dearest family, friends and colleagues….I’m forever grateful for you! Let’s continue to be the kind of women that want to help other women achieve their goals if it’s in our means to do so or connect them to others that can. Make a chain that doesn’t break and helps one another out! Cheers to all the lovely ladies!
To me, International women’s day is a day to be aware of all that has been accomplished but also sacrificed to get us to where we are today.
There are several loan options available that can help you finance your home renovation project.
A home equity loan is a type of loan that allows you to borrow money by using your home as collateral.
Home Renovation Loan is offered to customers seeking finance for upgrading, refurbishing or repairing their house property. Most banks, non-banking financial companies (NBFCs) and housing financial companies (HFCs) offer this facility either through their regular home loan product or as a separate offering within the broader category of home loans.
Both existing home loan borrowers as well as new customers can avail home renovation loans. There are several loan options available that can help you finance your home renovation project. Here are five loans available for home renovation:
-Home Equity Loan: A home equity loan is a type of loan that allows you to borrow money by using your home as collateral. It provides a lump sum of money that you can use for your home renovation project. The interest rates for home equity loans are generally lower when compared to other types of loans, and the loan term can range from 5 to 15 years. However, you need to have equity in your home to qualify for this loan.
-Home Equity Line of Credit (HELOC): A HELOC is a popular choice for homeowners looking to finance their renovation projects. It allows you to borrow against the equity in your home, which is the difference between your home’s market value and the amount you still owe on your mortgage. With a HELOC, you can access funds as needed and only pay interest on the amount you borrow. This flexible loan option offers competitive interest rates and can be a cost-effective way to finance your renovation. The interest rates for HELOCs are generally variable, and the loan term can range from 5 to 25 years.
-Personal Loan: If you don’t have significant equity in your home or prefer not to use it as collateral, a personal loan can be a suitable option for home renovation financing. Personal loans are unsecured loans, meaning they don’t require security. These loans typically have higher interest rates compared to home equity loans but offer a quick application process and flexibility in terms of loan amount and repayment period. The loan term can range from 1 to 7 years.
-FHA 203(k) Loan: If you’re purchasing a home that requires renovation or planning extensive renovations on your current home, an FHA 203(k) Rehabilitation Loan can be an excellent choice. The repayment tenure of the loan ranges from 15 to 30 years. However, you need to meet certain eligibility requirements to qualify for this loan. FHA 203(k) loans are government backed and often have more lenient requirements, making them accessible to a broader range of borrowers.
-Construction Loan: If your renovation project involves significant structural changes or additions, a construction loan might be the right fit. It is a short-term loan that is used to finance the construction of a home or other real estate project. With a construction loan, you can access funds in stages as the project progresses, and once the construction is complete, the loan can be converted into a traditional mortgage or paid off in full. This loan has higher interest rate than a conventional mortgage loan, so think twice when making choices.
When considering any bank loan for home renovation, it’s crucial to carefully assess your financial situation, project requirements, and the terms and conditions of each loan option. Remember to borrow responsibly and ensure that your renovation plans align with your budget and long-term financial goals.
About the Author
Namit Singh Sengar
Namit is Senior Sub Editor in the business vertical of News18.com. With over five years of experience, he covers personal finance, brands and economy.…Read More
If you are looking to buy a house, I have a bunch of home buying tips that will help you sort through all of your options, understand the real cost of a home (and help you save money), and make the right choice.
Buying a house is a huge purchase.
In fact, it is usually the largest purchase a person will ever make.
The median U.S. home value is $226,800 and the median price of homes currently listed is $291,900, according to Zillow. And, there are some areas that have much higher average home prices, like four to five times more.
Purchasing a house is a huge commitment, and it’s easy to get excited and forget to think about some very important things before plunking down a huge amount of money. There are just so many factors to think about, and not everyone will have the same concerns.
To help you through the home buying process, today’s post is going to be like a mini first time home buyer guide. I’m going to cover some of my best home buying tips, like:
Whether or not you should rent instead of buy
How to set a budget (one of the most important steps to buying a house for the first time)
Deciding what you want in a home
How to research the true cost of a house
Thinking about how long you’ll live in an area (recouping your costs)
How to avoid feeling rushed
Do you really need the house you’re about to buy
Whether you are a first time home buyer or if this is your second house or more, these are all things you should be thinking about.
Actually, these are the exact same things me and Wes have thought about before buying our sailboat and RV. They might not be “normal” homes, but they are what we live in. Plus, they are still very large purchases that need to be carefully thought out.
The home buying tips that I’m about to give you are to help you analyze what’s best for your situation – whether that’s a 5000 sq. ft. house, a 500 sq. ft. tiny home, an RV, a condo, etc.
I’ve said it already, but buying a house is a large purchase! And, everyone has felt that dreadful feeling that comes after making a large purchase and realizing that you have made a mistake. Perhaps you don’t realize for months or years later, but you eventually understand that you should have thought out your purchase a little bit more.
No one wants to feel this way after buying a house!
Articles related to buying a house tips:
Here are my best home buying tips.
Should you rent instead?
Before we started RVing, we sold our house and rented one for a little while. This raised quite a few eyebrows and led to questions about renting vs. buying from nearly everyone.
I even had several people tell me that I was making a stupid mistake.
I wasn’t surprised, though. Many people believe the myth that if you are renting a home you don’t know how to manage your money and that buying is always better, no matter what.
That couldn’t be further from the truth.
Sometimes buying can be the better decision, but there are times when renting can fit a person’s situation much better.
Buying a house can have a lot of positives, but that doesn’t mean it’s the right step for everyone.
To determine if renting is better for you, you’ll want to think about things such as:
How long you think you’ll live in the area.
Whether or not you’re ready to purchase a house, financially and/or responsibility wise.
Buying a home sometimes may be cheaper than renting, and the other way around.
Nearly everyone says that a house is a good investment. Many people will even go as far to say that doing anything other than owning a house would be a complete waste of money.
However, I don’t agree with that at all.
Buying a house isn’t for everyone. You shouldn’t just jump at the opportunity to buy a house, especially any ol’ house. And, you should think about all of the factors before deciding that buying a house over renting one is the best and only decision for you.
For home more renting vs. home buying tips, please read My Opinion Of The Great Renting vs Buying Debate for more information.
Set a budget before you look at homes.
“What’s the smartest way to buy a house?”
The smartest way to buy a house is to first think about your budget.
One of the first things you will want to do is to set a budget – you can’t go very far in the home buying process without one. It’s how you will know what you want to be pre-approved for, and a realtor will need that information to really help you shop for homes.
You will want to set yourself a budget when it comes to the home as well as all of the other expenses that go along with owning a home.
You will want to look at your overall financial situation and analyze:
The income you earn.
The stability of your job.
The amount of money you have saved for the down payment, other home expenses, etc.
Your credit history and credit score.
The total monthly amount you feel comfortable paying for a home. Make sure you look at all the costs involved!
Your total amount of debt.
When buying a house, it takes realizing all of these factors to understand what you can truly afford and be comfortable with.
However, many people justify buying a house that is over their budget, but that is a bad plan.
See, banks often pre-approve people for a mortgage payment that is higher than what they can afford to pay. You pre-approval number is not a good gauge of what you can afford because it doesn’t factor in the total cost of the house.
What you can afford takes that above list into consideration, not just the number a bank gives you. Because of that, it can be a very bad idea to go over the number the bank pre-approves you for. You should always stick to an amount that you can afford.
When determining what you can afford, you will want to think about ALL of the costs that come with buying a house and living in it. This means that your research should not end with the purchase price of the house – it actually goes way past that, as discussed in a later section of my home buying tips.
Think about what you want in a home.
If you are like most people, you’ve spent years thinking about what you want in a home.
Now is the time to make a list of those things. This is an important step when it comes to home buying for beginners.
Buying a house can lead to a crazy amount of new feelings – happiness, stress, excitement, and more. This can sometimes make every house you look at seem like the perfect one, and that’s because they all seem so new and exciting. This even happens with houses that don’t have everything you need. And, it definitely happens with ones that have more than you need.
Before you put an offer on a house, you should think about the reasons for why you want a specific house. This is one of the first steps to finding a house that’s right for you, as this can make sure you are getting exactly what you want and need, rather than just being happy with any home.
I recommend creating a wish list that includes all of the things you want in a home. Your wish list could include things like:
The square footage of the home
Size of yard
If you want a fenced in yard
How many bedrooms and bathrooms you desire
The age of the home
The quality of the schools
The parking situation and whether or not there is a garage
The size of the kitchen
Pool or no pool
Style of home
Whether you want to be in the country or the city
Your budget, and this one is extremely important!
And, you’ll also want to create a list of things that you want to stay away from, such as if you don’t want a place with a pool, a home with a lot of yard maintenance, a home that is a fixer upper, and so on.
By having this wish list on hand, you’ll know exactly what you should be looking at, and what you should avoid.
Research all of the expenses.
Like you just read, the listing price of a home is not all that you should look at.
When you find a home that you think is right for you, you need to make sure that you can afford all of the costs that come with that home.
Just because you can pay the monthly mortgage payment doesn’t mean that you can afford everything else that goes with it. There are ongoing costs when buying a house, which is something that many homebuyers forget about.
In fact, U.S. homeowners, on average, spend more than $9,400 per year in hidden homeownership costs, and maintenance expenses cost homeowners an average of $6,300 per year in unavoidable hidden costs, according to MarketWatch. These include things like homeowners insurance, property taxes, and utilities. So, this is one of the best home buying tips to help you stay out of a bad financial situation.
Before making a home purchase, you should think about how much the home will cost you in the long run. There are many ways to think of this, such as:
Property taxes. These vary widely from town to town. You may find yourself looking at two similar houses with similar price tags, but the property taxes may vary by thousands of dollars annually. That is a LOT of money. While it may seem small when compared to the actual home purchase price, remember that you have to pay property taxes annually, and a difference of just $3,600 a year is $300 a month.
Gas. Many homes use gas to run the hot water heater, the stove, and so on.
Electricity. Generally, the bigger your home, the higher your electricity bill.
Sewer. This isn’t super expensive, but it is generally around $30-$50 a month.
Trash. This isn’t super expensive either, but it does cost money.
Water (and possibly irrigation). Depending on how you use water and where you live, water bills can vary widely. I know many who live in areas where the average water bill is a few hundred dollars each month.
Home insurance. Home insurance can be cheap in some areas but crazy expensive in others. Don’t forget to look into the cost of earthquake, flood, and hurricane insurance, and know that it can add up quickly depending on where you live.
Maintenance and repairs. No matter how old your home is (even brand new homes), repair and maintenance costs will eventually come into play. In fact, U.S. homeowners pay an average of $3,435 per year in annual optional costs, including house cleaning, yard care, gutter cleaning, carpet cleaning, and pressure washing. But, don’t forget about things like needing a new roof or other repairs that may come up! Those are big expenses that you will need to be able to save up for.
Homeowners association fees. This can also vary widely. You should always see if the house you are interested in is part of an HOA. Often, the fees are high and involve rules you may not like.
Home furnishings. Furnishing your home can be done cheaply, but I know some who buy huge homes and can’t afford to put anything in them, such as a table, a bed, and so on. Why own a $500,000 house if you don’t have any furniture?
Always remember to add up the total cost when deciding to buy a house!
Estimate how long you will live in the area.
This is one of the home buying tips you might not think of because you are so anxious to be moving. How could you possibly think about moving again already?!
One of the best tips before buying a house is to think about how long you will live there.
Here’s why this is important to think about – it usually takes around five years to recoup the costs you paid to purchase a house. If you only live in a house for one or two years, then you may lose money on closing costs, due to the volatility of the real estate market, and more. Plus, it usually takes some time and legwork to buy a house, so you may not want to do it again so soon.
This is why you’ll want to think about how long you’ll be living in the area before you purchase your home.
You’ll want to make sure that the house will be suitable for you for at least five years, so you’ll want to think about things such as:
Are you happy with the area?
How are the schools?
Is the house big enough if you plan on starting a family?
Do you plan on working in the area for at least 5 years?
And so on.
You really need to think about your future when deciding to buy a house.
Don’t feel rushed.
“How long should you give yourself to buy a house?”
This is one of the home buying tips that is hard during a seller’s market, which is what’s happening in many areas right now. Knowing that homes are selling very quickly, you may feel rushed to find a house and put an offer in.
It’s also tempting to jump on a house the minute you find something you like, but if the purchase can wait 24 hours, then you may want to delay it. This will allow you more time to think about the purchase, go over your budget again, let any butterflies you have about the home purchase go away, and so on.
You will be able to make a much more rational decision if you think about your decision for at least 24 hours.
Plus, for all you know, you may even realize that you don’t want the house at all!
Do you really need or want that home?
“How do you make sure you get the house you want?”
Finally, the last of my home buying tips is to think about whether or not you actually need the house you are about to buy. It sounds easy enough, but many people do not even think about asking this question. When in fact, it is one of the most important questions to ask when buying a house (or any large purchase for that matter).
Really dig deep and ask yourself this simple question. Sure, you might think you want the house, but have you also been able to spend time thinking about the rest of my tips?
Do you know the full cost of the house? Are you okay spending that much? Does the house have everything you need?
Purchasing a home is a huge investment, and it deserves a lot of time and thought for you to make the best decision.
Have you bought a home recently? What other home buying tips should people think about?
The home-buying process can seem daunting for first-time homebuyers. The good news is there are some mortgage lenders that offer home loan products designed to provide more ease with the process, which can be very appealing to many first-time future homeowners.
To help you get started, CNBC Select rounded up a list of the best mortgage lenders first-time homebuyers should consider. We evaluated home loan lenders based on the types of loans offered, customer support, credit score requirements and minimum down payment amount, among others (see our methodology below.)
Beyond just the lowest rates, it’s important to go with the lender that offers the best loan terms to suit your needs. There’s a learning curve when it comes to homeownership, but we’ve included an FAQs section below to help you get a better understanding of some aspects of the process.
The best mortgage lenders for first-time homebuyers
Best for loan variety
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, HELOCs, Community Loan and Medical Professional Loan
10 – 30 years
Minimum down payment
0% if moving forward with a USDA loan
Offers a wide variety of loans to suit an array of customer needs
Available in all 50 states
Online and in-person service available
Doesn’t offer home renovation loans
Who’s this for? PNC Bank has a wide variety of home loan options, making it easy for first-time homebuyers to find a loan that suits their circumstances. This lender offers conventional loans, FHA loans, VA loans, jumbo loans and HELOCs. On top of that, PNC Bank offers USDA loans, which can be tougher to find among some lenders. PNC Bank also has some specialized loan options, like the Community Loan, which is meant for individuals with lower cash reserves and allows for a down payment as low as 3% and no PMI (private mortgage insurance).
It also offers a Medical Professional Loan for interns, residents, fellows or doctors who have completed their residency in the last five years. Eligible borrowers for this loan can borrow up to $1 million and won’t have to pay PMI, regardless of their down payment amount.
In addition to all these offerings, PNC Bank gives eligible borrowers the chance to qualify for a $5,000 grant to be used toward closing costs. Eligible borrowers must have an income at or below 80% of the median household income for the metropolitan statistical area (MSA), or their desired property must be located in a low- or moderate-income census tract as designated by the FFIEC, according to PNC’s website.
Best for educational offerings
Bank of America Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, FHA loans, VA loans, jumbo loans, doctor loans and the Affordable Loan Solution mortgage
15 – 30 years
Minimum down payment
0% if moving forward with a VA loan; 3% if moving forward with the Affordable Loan Solution mortgage
Offers a wide variety of loans to suit an array of customer needs
Offers an Edu-Series for educating first-time homebuyers as well as other learning resources and materials
Online and in-person service available
Fixed-rate and adjustable-rate mortgages offered
Reduced cost of mortgage insurance
Doesn’t offer USDA loans
Who’s this for? Bank of America stands out for its first-time homebuyer educational resources. Aside from home loan calculators, which are typical for mortgage lenders to provide on their websites, Bank of America has an online “Edu-Series” for first-time home buyers. There are also guides on its website that break down key terms and a list of FAQs geared toward first-time home buyers.
Bank of America also offers a variety of loan options, including a home loan for medical professionals. With this loan, doctors, dentists, residents and fellows can make down payment minimums that are tiered based on the size of the loan they’re applying for. They’ll put down at least 3% on mortgages up to $850,000, at least 5% on mortgages up to $1 million, at least 10% down on mortgages up to $1.5 million and at least 15% down on mortgages to $2 million. If you’re a medical professional, Bank of America will also exclude your student loan debt from your total debt when you’re applying for the loan. This could bring down your debt-to-income ratio for the purposes of applying for the loan and make it easier for you to qualify.
Even if you aren’t a qualifying medical professional, you can still potentially take advantage of tiered down payment terms through the Affordable Loan Solution mortgage option. With this loan, eligible borrowers can make a down payment as low as 3% on loan amounts up to $726,200, and as low as 5% on mortgages up to $1,089,300. Mortgage insurance would be required if making down payments lower than 20%, but according to Bank of America’s website, the mortgage insurance would come at a reduced cost compared to that of other conventional loans.
Best for lower credit scores
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and Jumbo loans
8 – 29 years, including 15-year and 30-year terms
Typically requires a 620 credit score but will consider applicants with a 580 credit score as long as other eligibility criteria are met
Minimum down payment
3.5% if moving forward with an FHA loan
Can use the loan to buy or refinance a single-family home, second home or investment property, or condo
Can get pre-qualified in minutes
Rocket Mortgage app for easy access to your account
Runs a hard inquiry in order to provide a personalized interest rate, which means your credit score may take a small hit
Doesn’t offer USDA loans, HELOCs, construction loans, or mortgages for mobile homes
Doesn’t manage accounts for jumbo loans after closing
Who’s this for? First-time homebuyers tend to be younger and may not have a long credit history, which can make it harder to qualify for a good mortgage rate. Rocket Mortgage stands here because it accepts applicants with credit scores as low as 580. The lender also has a program called the Fresh Start program that’s aimed at helping potential applicants boost their credit score before applying.
Rocket Mortgage offers conventional loans, FHA loans, VA loans and jumbo loans but not USDA loans, which means this lender may not be the most appealing for potential homebuyers who want to make a purchase with a 0% down payment. Rocket Mortgage doesn’t offer construction loans (if you want to build a brand new custom home) or HELOCs, but if you’re a homebuyer who only plans to purchase a single-family home, a second home, or a condo that’s already on the market, this shouldn’t be a drawback for you.
This lender offers flexible loan repayment terms that range from 8 – 29 years in addition to standard 15-year and 30-year terms.
Best for no lender fees
Ally Bank Mortgage
Annual Percentage Rate (APR)
Apply online for personalized rates; fixed-rate and adjustable-rate mortgages included
Types of loans
Conventional loans, HomeReady loan and Jumbo loans
15 – 30 years
Minimum down payment
3% if moving forward with a HomeReady loan
Ally HomeReady loan allows for a slightly smaller downpayment at 3%
Pre-approval in just three minutes
Available in all 50 U.S. states
Online support available
Doesn’t charge lender fees
Doesn’t offer FHA loans, USDA loans, VA loans or HELOCs
Who’s this for? Ally Bank doesn’t charge any application fee, origination fee, processing fee or underwriting fees. These are what’s collectively known as “lender fees” and they can cost you anywhere from a few hundred to a few thousand dollars, and eat into the money you put aside for buying your home. When you’re a first-time home buyer, going through the process as affordably as possible is often top-of-mind, so saving on these fees will let you keep more of your money for other things, like renovations or moving costs.
Keep in mind, though, that Ally Bank may still charge appraisal fees and recording fees and may charge for the title search and insurance. As long as you have all the necessary documents handy and submit complete and accurate information, you can get pre-approved for a loan in as little as three minutes online and submit your application in just 15 minutes.
Best for no PMI
Annual Percentage Rate (APR)
Apply online for personalized rates
Types of loans
Conventional loans, FHA loans, VA loans and Jumbo loans
15 – 30 years
Minimum down payment
Citi’s HomeRun Mortgage program allows for a downpayment as low as 3%
Citi’s Lender Assistance program gives eligible homebuyers a credit of up to $5,000 to use toward closing costs
Ability to choose between fixed-rate and adjustable-rate mortgages
New and existing Citi bank customers can qualify for closing cost discounts based on their account balance
HomeRun mortgage program allows for a downpayment of less than 20% without PMI
Provides homeownership education and counseling
No options for a 0% downpayment
Existing customers need high account balances to receive some of the highest interest rate discounts
Who’s this for? CitiMortgage gives homebuyers a chance to save big-time by waiving the PMI (private mortgage insurance) requirement on loans with down payments below 20%. This can be done by applying for a mortgage through Citi’s HomeRun program, which also allows for down payments as low as 3%.
PMI is typically a required monthly charge with other home loans if you make a down payment of 20% or less. But PMI can cost you tens of thousands of dollars extra over the entire life of the loan. The money you save from not paying PMI could potentially go towards saving for a second property, a home renovation, or any other financial goal you have. HomeRun mortgages also allow borrowers to lock in a fixed rate on their mortgage so they won’t have to worry about their rate increasing down the line.
How do mortgages work?
A mortgage is a type of loan you can use to purchase a home. This agreement essentially says you can purchase a home without paying for it in full, upfront — you’ll just need to put some of the money down — usually between 3% and 20% of the home price — and pay smaller, fixed monthly payments over a certain number of years, plus interest and potentially other charges. Having a mortgage allows you to own the property even if you don’t have the hundreds of thousands of dollars in cash needed to purchase it outright.
What is a conventional loan?
A conventional loan is a home loan that’s funded by private lenders and sold to government enterprises such as Fannie Mae and Freddie Mac. It’s a very common loan type and some lenders may require a down payment as low as 3% or 5%.
What is an FHA loan?
A Federal Housing Administration loan, or FHA loan, is a loan program that has some slightly looser requirements. For example, this loan program may allow some borrowers to be approved for a loan with a lower credit score or be able to get away with having a higher debt-to-income ratio. You’ll typically only need to make a 3.5% down payment with this type of loan.
What is a USDA loan?
A USDA loan is offered through the United States Department of Agriculture and is aimed at borrowers who want to purchase a home in a qualifying rural area. USDA loans don’t require a minimum down payment, so borrowers can use this loan to purchase a home for almost no money upfront (you’ll still likely pay fees, though).
What is a VA loan?
VA mortgage loans are provided through the U.S. Department of Veterans Affairs and are meant for service members, veterans and their spouses. They typically require a 0% down payment and borrowers don’t have to pay private mortgage insurance.
What is a jumbo loan?
A jumbo loan is meant for home buyers who need to borrow more than $647,200 to purchase a home. Jumbo loans usually have stricter credit score and debt-to-income ratio requirements, and they also typically require a larger minimum down payment.
How is my mortgage rate decided?
Mortgage rates change almost daily and can depend on market forces such as inflation and the overall economy. However, your specific mortgage rate will depend on your location, credit report and credit score. The higher your credit score, the more likely you are to be qualified for a lower mortgage interest rate.
Be sure to submit the necessary information for more personalized rate estimates from your desired lender.
What is the difference between a 15- and 30-year term?
A 15-year mortgage gives homeowners 15 years to pay it off in fixed, equal amounts plus interest, while a 30-year mortgage gives homeowners 30 years to pay it off. Monthly payments are generally lower with a 30-year mortgage since you’ll have a longer period of time to pay off the loan. However, you’ll wind up paying more in interest over the life of the loan since it is charged on a monthly basis. A 15-year mortgage, on the other hand, lets you save on interest but you’ll likely have to make a higher monthly payment.
How does private mortgage insurance (PMI) work?
Lenders charge private mortgage insurance (PMI) to protect themselves in the event that a borrower defaults on their loan. PMI is assessed to your account if you choose to make a down payment of less than 20%. You’ll be responsible for paying this in addition to your monthly mortgage payments.
However, you can usually have the PMI waived after you’ve made enough payments to build 20% equity in your home.
If you need to take out a mortgage to purchase your first home, you have options. Certain mortgage lenders stand out for first-time homebuyers by considering applicants with lower credit scores, offering lower down payments and providing useful educational resources.
Keep in mind that mortgage interest rates fluctuate often and the rate you receive will vary depending on your location, credit score and credit report. While lenders may post general interest rate ranges on their websites, the best way to get a more accurate estimate of your rate is to provide the necessary information to check your rate.
To determine which mortgage lenders are the best for first-time homebuyers, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks, including large credit unions, that come with fixed-rate APRs and flexible loan amounts and terms to suit an array of financing needs.
When narrowing down and ranking the best mortgages, we focused on the following features:
Fixed-rate APR: Variable rates can go up and down over the lifetime of your loan. With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
Types of loans offered: The most common kinds of mortgage loans include conventional loans, FHA loans and VA loans. In addition to these loans, lenders may also offer USDA loans and jumbo loans. Having more options available means the lender is able to cater to a wider range of applicant needs. We have also considered loans that would suit the needs of borrowers who plan to purchase their second home or a rental property.
Closing timeline: The lenders on our list are able to offer closing timelines that vary from as promptly as two weeks after the home purchase agreement has been signed to as many as 45 days after the agreement has been signed. Specific closing timelines have been noted for each lender.
Fees: Common fees associated with mortgage applications include origination fees, application fees, underwriting fees, processing fees and administrative fees. We evaluate these fees in addition to other features when determining the overall offer from each lender. Though some lenders on this list do not charge these fees, we have noted any instances in which a particular lender does.
Flexible minimum and maximum loan amounts/terms: Each mortgage lender provides a variety of financing options that you can customize based on your monthly budget and how long you need to pay back your loan.
No early payoff penalties: The mortgage lenders on our list do not charge borrowers for paying off the loan early.
Streamlined application process: We considered whether lenders offered a convenient, fast online application process and/or an in-person procedure at local branches.
Customer support: Every mortgage lender on our list provides customer service via telephone, email or secure online messaging. We also opted for lenders with an online resource hub or advice center to help you educate yourself about the personal loan process and your finances.
Minimum down payment: Although minimum down payment amounts depend on the type of loan a borrower applies for, we noted lenders that offer additional specialty loans that come with a lower minimum down payment amount.
After reviewing the above features, we sorted our recommendations by best for loan variety, educational offerings, lower redit scores, no lender fees and no PMI.
Note that the rates and fee structures advertised for mortgages are subject to fluctuate in accordance with the Fed rate. However, once you accept your mortgage agreement, a fixed-rate APR will guarantee the interest rate and monthly payment remain consistent throughout the entire term of the loan, unless you choose to refinance your mortgage at a later date for a potentially lower APR. Your APR, monthly payment and loan amount depend on your credit history, creditworthiness, debt-to-income ratio and the desired loan term. To take out a mortgage, lenders will conduct a hard credit inquiry and request a full application, which could require proof of income, identity verification, proof of address and more.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
As rent prices continue to soar all over the country, you may be finding yourself entering your first real estate search.
You’re not alone. According to the National Association of Realtors, millennials are ending their leases and buying homes in large numbers. Those in their late 20’s to early 30’s now make up the fastest-growing segment of buyers today. But how to even shop for a home these days?
First-time buyers might remember being dragged to Sunday open houses with their looky-loo parents, but those days are gone. Everything is online, and many real estate apps have sprung up to help buyers find their dream homes.
The 7 Best Home Buying Apps
Zillow: Best for overall use
Trulia: Best for community insight
Homesnap: Best for convenience
Redfin: Best for multilevel support
Rocket Homes: Best for one-stop shop
Realtor.com: Best for reliability
Homes.com: Best for quicking listing updates
Best Home Buying Apps at a Glance
34 map overlays
30M neighborhood reviews
Area trend reports
Optimized for mobile
Quick listing updates
Home showings via Zoom
Between for-sale-by-owner and official properties, it provides users access to over 135 million property listings.
The “Zestimate” algorithm uses tax records to produce home value estimates, which sometimes are inaccurate.
The Zillow house-hunting app app is the most downloaded real estate app on the Apple store and Google Play — and for good reason. Its database constantly updates and has 36 million users monthly. You can set up push notifications for new real estate listings that meet your search criteria so you’ll never miss out on your potential dream home.
The app allows you to filter real estate listings by price, ZIP code, square footage, must-have features and more. You can even coordinate your search with a partner or roommate by tagging home features and sharing your favorites.
Zillow provides 3-D tours and a scheduling feature to set up an in-person tour. One of its best features is self tours of Zillow-owned homes, a feature available in some markets that allows house hunters to stop by the property at their convenience and simply unlock the house with the app.
Newly added to the Zillow app is a “natural-language search” tool, which responds to user questions in direct fashion, rather than requiring users to type multiple search questions to get to where they want to go.
It’s the official search portal for the National Association of Realtors, meaning its updates are the most accurate.
Clicking on “contact agent” will not go to the listing agent, but instead to a local real estate agent who has paid for this lead service.
Realtor.com is one of the best home buying apps out there for on-market listings. Being the official search portal for the National Association of Realtors means you can trust the home listings that pop up in your search. The data is directly mined from the MLS (multiple listing service) and refreshes every 15 minutes.
The search features include a wide variety of filters and provides the most detailed real estate listing descriptions, which include things like crime rates, school ratings, property tax and history of home value estimates — even things like the neighborhood noise levels or whether a home is in a FEMA flood zone.
Because the app updates so often, setting up push notifications means you’ll quickly know when a new property hits the local market. You’ll also have the power of the “Sign Snap” tool in your pocket the next time you drive by a “for sale” sign. All you have to do is take a photo and Realtor.com pulls all of the home’s details instantly.
Shows names and contact information for listing agents, so users know who they would be working with for each listing.
You’re prompted to call or email the listing agent on any property you view, which can get in the way of casual browsing.
Acquired by Zillow in 2015, Trulia has access to most of Zillow’s database of over 135 million active listings and has become one of the best real estate apps. What sets it apart is the focus on community insight provided by those who are located in the area you are searching. You’ll not only get details on the property, but information on what it’s like to live in that specific neighborhood.
You’ll be alerted about price reductions and upcoming open houses, and the app will recommend new listings. Insights sourced straight from locals and 34 neighborhood map overlays offer details on commute times, nearby businesses, crime rates, nearby schools, and more.
Two other features added in 2018 distinguishes the Trulia app from others. “What locals say” and “local legal protections,” combine local feedback and public data to provide information about what a neighborhood is like, from level of dog-friendliness, day-in-the-life details, and even how folks decorate for the holidays.
You’ll also be able to see whether there is legislation in the area to protect against discrimination for gender identity or sexual orientation in employment, housing or public accommodations.
Lets you access your TransUnion credit report, which is updated every week.
Does not provide a home value estimate.
Similar to Trulia, Rocket Homes puts an emphasis on getting to know your soon-to-be neighborhood, but from a market statistics perspective.
This real estate knowledge will come in handy when searching for a home. You can compare properties in the area, seeing how long they’ve been on the market and what they sold for. If you’re not planning on living in your first home forever, this will help give you an idea of what kind of return on investment you can expect from your purchase in the future.
Rocket Homes is a product of Quicken Loans, giving you the opportunity to shop for homes from new and updated listings and have access to lending services all in one place.
This real estate app also helps you stay on track when it comes to some of the more boring parts of purchasing a home, like tracking your credit score. Rocket Homes gives you access to a free TransUnion credit report that is updated frequently, so you know exactly where you stand before starting the mortgage application process.
Get extensive details on a home just by snapping a photo of it.
Lack of coverage in some areas; Homesnap must partner with individual multiple listing services.
The Homesnap real estate app is perfect for the on-the-go house hunter. You can simply snap a photo of a home and get all of the data available. This feature means you have real-time connection to your local multiple listing service from the road.
If you choose to search from the comfort of your home instead, the Homesnap app allows you to search for open houses by date, and even provides live-broadcast, virtual showings if you want to avoid mingling with other buyers in person.
You can collaborate with your real estate agent through a built-in private messaging function that automatically saves your listings for quick reference. Like most real estate apps, you have a ton of customizable filters for efficient searching, and will be provided with up to date information about the home and neighborhood like commute times, satellite photos and more.
Updates every five minutes so you never miss a new listing.
If you don’t live in one of the 90 U.S. and Canada markets where Redfin has agents, you won’t be able to connect with one.
Redfin’s out-of-the-box-business model combines the convenience of a high-performance app and the expertise you can only get by working with a real estate agent directly. Because Redfin is also a brokerage firm, you’ll have access to their top-quality real estate agents.
Working with a real estate agent gives you more in-depth market insights so you can make smart home buying decisions. And through the “Hot Homes” feature you’ll know which homes are more likely to sell fast so you don’t miss your chance of putting in an offer while house hunting.
Redfin also recently updated its data on climate risk, school ratings and neighborhood amenities.
Most of 2020 was spent updating the speed and user-friendliness of the app.
Limited information on neighborhood and demographic data.
The Homes.com app is partnered with the MLS to bring you quality leads on your home buying search. The app offers a plethora of filter criteria like the other apps, such as square footage, ZIP code, number of bedrooms and bathrooms, but has an emphasis on lifestyle. Not only will you find the best house, but in the neighborhood that’s right for you.
The exclamation icon makes it easy to spot new real estate listings when scrolling through your search results. You also have the option to “favorite” or “block” certain properties in your feed so you can revisit the ones you love and eliminate the ones you don’t.
The mortgage calculator on Homes.com includes specific financing options like FHA (Federal Housing Administration) loans and special rates for active military members or retired veterans.
Frequently Asked Questions (FAQs) About Home Buying Apps
There’s a lot of home buying apps to pick from when you are seriously or even casually looking for a home. We’ve rounded up answers to some of the most common questions about home buying apps.
Which App is Best for Buying a House?
The best app for buying a house is the one that fits your needs. But Zillow is the most popular because it does a lot of things right, including allowing users to filter information by price, ZIP code, square footage, must-have features and more. Zillow also lists for-sale-by-owner homes. Zillow is the most downloaded real estate app on the Apple store and Google Play. It gets a 4.7 rating out of 5 from 475K reviews on Google Play. In the Apple App store, more than 6 million reviews get Zillow a 4.8 rating.
What are Home Buying Apps?
Home buying apps are mobile tools accessible on various digital devices that let users see listings to buy, sell or rent a property. Different apps have unique features but all of them include multiple photos of properties, prices, property tax and loan information and the ability to connect with real estate professionals.
Home buying apps provide many benefits to users because of their national coverage and even global offerings. Users can see maps and learn about neighborhoods, too. Best of all, they are free.
How Accurate are Home Buying Apps?
Because home buying apps take information from various sources, there will always be a margin of error in valuations. Estimated values are made from information gathered from county and tax assessor records, multiple listing services and real estate companies.
For properties on the market, the apps should have accurate asking prices or rental amounts. Where there is more variation is on property estimates, including for properties not on the market. You should consider these ballpark figures and not 100% accurate especially in a hot market when prices are jumping seemingly daily.. The apps are a good place to start but most people follow that information with a call to a real estate professional.
What is the Best House Hunting Site?
Zillow is the best overall site with its massive listing bank while Realtor.com is tops for reliable information. Trulia is excellent if you want more information about the community around a home. Homesnap is tops for photos and it is optimized well for mobile. If you want to connect with a Realtor, check out Redfin and if you want a direct line to a lending service, Rocket Homes may be the right pick for you.
Which App is Better: Zillow or Redfin?
Zillow edges out Redfin because of its massive reach. Redfin is not available in every market. However, Redfin is a brokerage which connects directly to the massive database of real estate listings commonly called MLS. Zillow does not do that. Zillow allows for sale by owner listings and Redfin does not.
What is the Most Popular Real Estate Website?
Zillow is the leading real estate website with more than 36 million unique visitors a month and about 135 million live listings. Trulia, which Zillow has owned since 2015, comes in second with 23 million unique visitors. Zillow was founded in Seattle in 2006 and claims to be the most accurate at price estimates, called ‘Zestimates” though there are lots of claims otherwise.
The Bottom Line About Home-Buying Apps
As you can see, if you’re ready to break up with your landlord, calculate what down payment you can afford and start your journey to home ownership, you have plenty of house-hunting apps to take advantage of.
Along with all the other details involved in this adventure, it may take some trial and error to find the app that hones in on your specific house-hunting search criteria. But it’s worth spending the time if it helps you get everything you want in your first home.
Contributor Tiffany Beyer is a social media coordinator and marketer specializing based in St. Petersburg, Florida. She specializes in real estate and lifestyle issues stories. Freelancer Kent McDill contributed to this post.
Inside: This guide will teach you about the different factors you need to consider when purchasing a home with a 70k salary.
There are a lot of factors to consider when you’re trying to figure out how much house you can afford. Your income, your debts, your down payment, and the interest rate on your mortgage all play a role in determining how much house you can afford.
Your situation will be different than the person next-door or your co-coworker.
Making 70000 a year is a great salary. You are making the median salary in the United States.
It’s enough to comfortably afford most homes and gives you plenty of room to save money each month.
But how much house can you actually afford?
It depends on several factors, including your down payment, interest rate, income, and credit score.
In this ultimate guide, we’ll walk you through everything you need to know about how much house you can afford making 70000 a year.
how much house can i afford on 70k
In general, you can expect to spend 28-36% of your income on housing.
Generally speaking, if you make $70,000 a year, you can afford a house between $226,000 and $380,000.
How much mortgage on 70k salary?
In general, you should expect to spend no more than 28% of your monthly income on a mortgage payment.
Thus, you can spend approximately$1633-2100 a month on a mortgage.
Just remember this is relative to the interest rate, term length of the loan, down payment, and other factors.
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But there’s one factor that trumps all the others: The 28/36 rule.
Also known as the debt-to-income (DTI) ratio.
The 28/36 rule is a guideline that says that your housing costs (mortgage payments, property taxes, homeowners insurance, and HOA fees) should not exceed 28% of your gross monthly income.
And your total debt (housing costs plus any other debts you have, like car payments or credit card bills) should not exceed 36% of your gross monthly income.
You must follow the 28/36 rule.
How to calculate how much mortgage you can afford?
If you’re like most people, you probably don’t know how to calculate how much mortgage you can afford.
This is actually a really important question that you need to ask yourself before beginning the home-buying process.
The answer will help determine the price range of homes you should be looking at. Plus know how much money you’ll need to save for a down payment.
Step #1: Check Interest Rates
Research current mortgage rates to get an accurate estimate. You can also check your credit score and search for average mortgage rates based on your credit score.
Right now, with sky-high inflation, you are unable to afford a bigger house when interest rates are hovering around 6% compared to ultra-low interest rates of 2.5%.
With a 70k salary, this can be the difference between $50-100k on the total mortgage amount you can afford.
Step #2: Use a Mortgage Calculator
Use a mortgage calculator to get an estimate of the home price you can afford based on your income, debt profile, and down payment.
Generally, lenders cap the maximum amount of monthly gross income you can use toward the loan’s principal and interest payment to not more than 28% of your gross monthly income (called the “Front-End” or “Housing Expense” ratio). Then, limit your total allowable debt-to-income ratio (called the “Back-End” ratio) to not more than 36%.
You can use a mortgage calculator to a ballpark range of what house you can afford.
Step #3: Taxes, Insurance, and PMI
When planning for a home purchase, it’s important to factor in all of your monthly expenses, including taxes, insurance, and PMI.
This will ensure that you get an accurate estimate of your home-buying budget based on your household annual income.
Don’t forget to include these payments to get a realistic understanding of your monthly budget.
Step #4: Remember your Living Expenses
When considering how much house you can afford based on your $70,000 salary, you must consider your lifestyle and current expenses.
It is important to factor in other monthly expenses such as cell phone and internet bills, utilities, insurance costs, and other bills.
More than likely, you will be approved for a higher mortgage amount than you would feel comfortable with. This is 100% what lenders will do.
They want to provide you with the most you can afford – not what you should afford.
Step #5: Get prequalified
Prequalifying for a mortgage is an important first step to take when estimating how much house you can afford.
It gives you a more precise figure to work with and helps you make a more informed decision based on your personal situation.
Remember that your final amount will vary depending on a number of factors, especially your interest rate, which will be based on your credit score.
Taking the time to research current mortgage rates helps you secure a better mortgage rate, giving you more buying power.
Home Buying by Down Payment
How much house can you afford?
It’s a common question among home buyers — especially first-time home buyers. Use this table to figure out how much house you can reasonably afford given your salary and other monthly obligations.
The assumption is 30 year fixed mortgage, good credit (690-719), no monthly debt, and a 4% interest rate.
How Much House Can I Afford?
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.
Mortgage on 70k Salary Based on Monthly Payment and Interest Rate
How much house can you afford on a $70,000 salary?
This largely depends on the current interest rate of the mortgage loan you’re considering. When interest rates are high, people aren’t actively buying as when interest rates are low.
By understanding these factors, you can better gauge how much house you can afford on a $70,000 salary.
The assumption is 30 year fixed mortgage, good credit (690-719), no monthly debt, and a 20% downpayment.
How Much House Can I Afford?
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.
Home Affordability Calculator by Debt-to-Income Ratio
Around here at Money Bliss, we always stress that debt will hold you back.
In the case of buying a house, debt increases your DTI ratio.
Here is a glimpse at what monthly debt can cause your debt-to-income (DTI) ratio to increase. Thus, making the house you want to buy to be more difficult.
How Much House Can I Afford?
**Your own interest rate, monthly payment, and how much house you can afford will vary on your personal circumstances.
Increase your Home Buying Budget
Here are a few ways you can increase your home buying budget when buying a house on a $70k annual income.
By following these steps, you can increase your home buying budget and find a more suitable house for your income.
1. Pick a Cheaper Home
Home prices vary significantly in different parts of the country.
Moving out of a major metropolitan area with notoriously high housing costs can help you find more affordable homes.
There are plenty of ways to find a home that is cheaper than you would normally expect.
Look for homes that are for sale in less desirable neighborhoods.
Find homes that are for sale by owner or have not been listed yet.
Check for homes that are for sale outside of your usual price range and haven’t sold as they may drop their price.
Move to a lower cost of living area.
2. Increase Your Down Payment Savings
A larger down payment can reduce the amount you have to finance, which lowers your monthly payment.
Plus help you get a lower interest rate and avoid paying PMI.
Putting down at least 10-20 percent of the home sale price can help boost your home buying power. You can also take advantage of down payment assistance programs in your area.
3. Pay Down Your Existing Debt
Paying down your debts such as credit card debts or auto loans can help raise your maximum home loan.
Paying down your debts can help you qualify for a higher loan amount.
This is because when you have lower amounts of debt, your credit score is higher and your debt-to-income ratio is less. This means you are less likely to be rejected for a home loan.
4. Improve Your Credit Score
A higher credit score can lead to lower rates and more affordable payments.
You can improve your credit score by:
Paying your bills on time
Paying down your credit card balances
Avoiding opening new credit before applying for a mortgage
Disputing any errors on your credit report
This is very true! We had an unfortunate debt that wasn’t ours added to our credit report right before closing. While the debt was an error, it still cost us a higher interest rate and forced us to refinance once the credit report was fixed.
5. Increase Your Income
Asking for a raise, seeking a higher-paid position, or starting a side gig can help you increase the amount of home you can afford.
While you need two years of income from a side gig or your own online business to count as income, the extra cash earned helps you to increase the size of your downpayment. Plus it lowers your debt-to-income ratio with the savings you are setting aside.
What factors should you consider when deciding how much you can afford for a mortgage?
How much house can you afford on your current salary and with your current monthly debts?
This is a question that we are often asked, and it’s one that we love to answer.
We’ll walk you through all the different factors that go into this decision so that you can make an informed choice.
1. Loan amount
The loan amount is a key factor that affects the total cost of a mortgage.
If you have no outstanding debt, a 20% down payment, a high credit score, and a 3.5% interest rate from an FHA loan, you could be able to afford up to $508,000.
However, if you have debt, a smaller down payment, or a lower credit score, the loan amount you can qualify for will be lower.
Similarly, if you choose a 15-year fixed-rate loan, your monthly payments will be higher, but you will end up paying less in interest over the life of the loan than with a 30-year fixed-rate loan.
Ultimately, your loan amount will affect the total cost of your mortgage, so it’s important to consider all the factors when making your decision.
2. Mortgage Interest rate
Mortgage interest rates can have a significant impact on the cost of a mortgage. The higher the interest rate, the more expensive the loan will be.
For example, a difference between a 3% and 4% interest rate on a $300,000 mortgage is more than $150 on the monthly payment.
Remember, in the first few years of a mortgage, the majority of the payment goes toward interest rather than trying to reduce the principal amount.
3. Type of Mortgage
The primary difference between a fixed and variable mortgage is the interest rate and the amount of your payment
Fixed-rate mortgages offer the stability of having the same interest rate for the life of the loan.
Adjustable-rate mortgages (ARMs) come with lower interest rates to start, but those rates can change over the life of the loan. ARMs are often a riskier choice, as if the economy falters, the interest rate can go up.
Fixed-rate loans are typically the most popular choice, as the monthly payment amount is more predictable and easier to budget for. The terms of a fixed-rate loan can range from 10 to 30 years, depending on the lender.
Adjustable-rate mortgages (ARMs) have interest rates that can increase or decrease annually based on an index plus a margin. ARMs are typically more attractive to borrowers who plan on staying in the home for a shorter period of time, as the lower initial interest rate can make the payments more manageable.
The Money Bliss recommendation is to choose a 15-year fixed-rate mortgage.
4. Property value
Property value can have a direct effect on how much you can afford for a mortgage.
As the value of the property increases, so does the amount of money you will need to borrow to purchase it. This, in turn, affects the monthly payments and the amount of interest you will pay over the life of the loan.
This is especially important as many people have been priced out of the market with the rising home prices.
Additionally, higher property values can mean higher taxes, which will add to the amount you need to budget for your mortgage payments.
5. Homeowner insurance
Homeowner’s insurance is a requirement when securing a loan and it can vary depending on the value and location of the home.
Additionally, certain areas that are prone to natural disasters or are located in densely populated areas may have higher premiums than other locations and may require additional insurance like flood insurance.
As a result, lenders typically require that you purchase homeowners insurance in order to secure a loan, and may have specific requirements for the type or amount of coverage that you need to purchase.
Before committing to a mortgage, it is important to consider the cost of homeowner’s insurance and make sure it fits into your budget.
This is something you do not want to skimp on as the cost to replace a home is very expensive.
6. Property taxes
Property taxes are calculated based on the value of a home and the tax rate of the city or county where the property resides.
The higher the property taxes, the more you will have to pay in your monthly mortgage payment.
In states with high property taxes, the property tax bill can be a large sum of the mortgage payment.
It is important to consider these costs when comparing different homes and locations to ensure you can afford the home without stretching your budget too thin.
7. Home repairs and maintenance
It’s important to also consider other factors such as the age of the house, since some properties may require renovation and repairs that can cost more than the house price itself.
Beyond the cost of purchasing a home, homeowners will likely have other expenses related to owning and maintaining the property.
Also, many homeowners prefer to do significant upgrades to the home before moving in, which comes at an additional expense.
These can include ordinary expenses such as painting, taking care of a lawn, fixing appliances, and cleaning living spaces, which can add up.
Additionally, it’s advisable to buy a home that falls in the middle of your price range to ensure you have some extra money for unexpected costs, such as repairs and maintenance.
8. HOA or Homeowners Association Maintenance
This is often an overlooked factor by many new homebuyers, but extremely important as some HOAs add $500-800 per month to the total housing budget.
The purpose of a homeowners association (HOA) is to establish a set of rules and regulations for residents to follow as well as maintain the community or building.
These fees are typically used to pay for maintenance, amenities, landscaping, and concierge services.
HOA fees are used to finance community upkeep, including landscaping and joint space development, and can range from $100 to over $1,000 per month, depending on the amenities in the association.
9. Utility bills
When switching from renting to buying a home, you will have to factor in the costs of your monthly utility bills such as electricity, natural gas, water, garbage and recycling, cable TV, internet, and cell phone when calculating how much mortgage you can afford.
In addition, the larger the home, the higher the costs to heat and cool your new home.
Make sure to ask your realtor for previous utility bills on the property you are interested in.
10. Private Mortgage Insurance
The purpose of private mortgage insurance (PMI) is to protect the lender in the event of foreclosure. It is typically required when a borrower is unable to make a 20% down payment on a home purchase.
PMI allows borrowers to purchase a home with less upfront capital, but also comes with additional monthly costs that are added to the mortgage payment. These fees range from 0.5% to 2.5% of the loan’s value annually and are based on the amount of money put down.
PMI can also be canceled or refinanced once the borrower has achieved 20% equity in the home or when the outstanding loan amount reaches 80% of the home’s purchase price.
11. Moving costs
Moving is expensive, but also a pain to do. So, consider the moving costs associated with relocating from one location to another.
Typically fees for packing, transportation, and possibly storage, and can vary depending on the size of the move and the distance the move needs to cover.
Also, consider if by buying a home, you will stop having moving costs associated with moving from rental to rental.
When determining how much house you can afford, it’s important to consider several factors.
These include your income, existing debts, interest rates, credit history, credit score, monthly debt, monthly expenses, utilities, groceries, down payment, loan options (such as FHA or VA loans), and location (which affects the interest rate and property tax). Also, think about the costs of maintaining or renovating a home.
Additionally, you should also evaluate your own budget and assess whether now is the right time to purchase a home. Taking all of these factors into account can help you set the maximum limit on what you can realistically afford.
A mortgage calculator can help you determine your home affordability by providing an estimate of the home price you can afford based on your income, debt profile, and down payment.
It works by inputting your annual income and estimated mortgage rate, which then calculates the maximum amount of money you’re able to spend on a house and the expected monthly payment.
Additionally, different methods are available to factor in your debt-to-income ratio or your proposed housing budget, allowing you to get a more accurate estimate of your home buying budget.
The debt-to-income ratio or DTI is used by lenders to assess a borrower’s ability to make mortgage payments.
This ratio is calculated by taking the total of all of a borrower’s monthly recurring debts (including mortgage payments) and dividing it by the borrower’s monthly pre-tax household income.
A high DTI ratio indicates that the borrower’s debt is high relative to income, and could reduce the amount of loan they are qualified to receive.
Generally, lenders prefer a DTI of 36% or less, which allows borrowers to qualify for better interest rates on their mortgages.
To calculate their DTI, borrowers should include debt such as credit card payments, car loans, student and other loans, along with housing expenses. It is important to note that the DTI does not include other monthly expenses such as groceries, gas, or current rent payments.
Closing costs can have an enormous impact on how much home you’re able to afford.
From application fees and down payments to attorney costs and credit report fees, these costs can add up quickly and affect your overall budget. Unfortunately, most of these closing costs are non-negotiable, but you can ask the seller to pay them.
When buying a house, it is important to research the different mortgage options available to you.
You can typically choose between a conventional loan that is guaranteed by a private lender or banking institution, or a government-backed loan. Depending on your monthly payment and down payment availability, you may be able to select between a 15-year or a 30-year loan.
A conventional loan typically offers better interest rates and payment flexibility.
While a government-backed loan may be more lenient with its credit and down payment requirements.
For veterans or first-time home buyers, there may be special mortgage options available to them.
Ultimately, it is important to talk to a lender to see which loan type is best for your personal circumstances.
When it comes to saving for a down payment, it’s important to understand how much you’ll need and how much it will affect your budget.
Generally, you’ll need 20% of the cost of the home for a conventional mortgage and 25% for an investment property. When you put down more money, it gives you more buying power and may help you negotiate a lower interest rate.
For example, if you’re buying a $300,000 house, you’ll need a down payment of $60,000 for a conventional mortgage. On the other hand, if you put down 10%, you can still afford a $395,557 house. But, you will have to pay for private mortgage insurance.
In addition, there are other ways to help you cover these upfront costs. You can look into down payment assistance programs.
Ultimately, the size of your down payment will depend on your budget and financial goals. You should never deplete your savings account just to make a larger down payment. It’s important to factor in emergency funds and other expenses when deciding on the best option.
Eligibility requirements for loan lenders can vary, but in general, lenders are looking for borrowers with a good credit score, a reliable income, and a history of employment or income stability.
For most loan types, borrowers will need to show a history of two consecutive years of employment in order to qualify. However, lenders may be more flexible if the borrower is just beginning their career or if they are self-employed and do not have W2 forms and official pay stubs.
Income verification also needs to be done “on paper”, meaning that cash tips that do not appear on pay stubs or W2s can not be used as income. The lender will look at the household’s average pre-tax income over a two-year period before determining the amount that can be borrowed.
In order to make sure that the borrower is financially secure, lenders will also pull the borrower’s credit report and base their pre-approval on the credit score and debt-to-income ratio. Employment verification may also be done.
For certain government-backed loan types, such as FHA, VA, and USDA loans, there may be additional or different requirements for eligibility. For instance, for FHA loans, the borrower must intend to use the home as a primary residence and live in it within two months after closing. VA loans are more lenient, and may not require a down payment.
The qualifications for VA loans vary based on the period and amount of time the borrower has served. There are many ways to qualify, whether the borrower is a veteran, active duty service member, reservist, or member of the National Guard. For more information on eligibility requirements for VA loans, borrowers can visit the U.S. Department of Veteran Affairs.
A good credit score will mean you have access to more lending options, better interest rates, and more purchasing power.
On the other hand, a poor credit score could mean you are approved for a loan, but at a higher interest rate and with a smaller house.
This means your budget will be more limited and you may not be able to buy as much home as you had hoped for. Additionally, lenders will also look at other factors, such as your debt-to-income ratio, employment history, and loan term, in order to determine your overall affordability.
What House Can I Afford on 70k a year?
As a borrower, you need to consider the interest rate, down payment, credit score, debt-to-income ratio, employment history, and loan term when determining how much house you can afford.
A higher credit score can often mean a lower interest rate, and a larger down payment can bring down the monthly payments.
All of these factors can have an effect on the amount of money you can borrow and the home you can afford.
Ultimately, understanding the impact of different factors can help borrowers make the best decisions when it comes to getting a mortgage.
Now that you know how much house you can afford, it’s time to start saving for a down payment.
The sooner you start saving, the sooner you’ll be able to move into your dream home. But you may have to wait if you are considering a mansion.
By taking into consideration this guide into account, you can make a more informed decision about the cost of a mortgage for your new home.
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